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Systematic signals of short squeezes: insights from rare events

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  • Svoboda, Dominik
  • Kapounek, Svatopluk
  • Albrecht, Peter

Abstract

Our paper investigates the determinants of short squeeze occurrences from rare events using a unique hand-collected dataset. Our results show that elevated short interest and spikes in investor attention significantly increase the likelihood of a short squeeze, while institutional ownership has a stabilizing effect. These findings suggest that short squeezes are not purely random events but can be systematically anticipated based on observable market signals. The study offers implications for traders, portfolio managers, and regulators seeking to better understand and monitor the conditions under which short squeezes are likely to occur.

Suggested Citation

  • Svoboda, Dominik & Kapounek, Svatopluk & Albrecht, Peter, 2026. "Systematic signals of short squeezes: insights from rare events," The North American Journal of Economics and Finance, Elsevier, vol. 85(C).
    • Handle: RePEc:eee:ecofin:v:85:y:2026:i:c:s1062940826000598
    DOI: 10.1016/j.najef.2026.102637
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